It was in 2006 when traveling from Mumbai to Delhi Gaurav Aggarwal had to go to Roorkee. But sitting in Mumbai, he found no reliable option to book a car. That’s when he realized the need for a reliable car rental that is available 24×7 where the customer is assured of a clean, fully functioning car and an informed courteous driver. He analyzed the scope of future of car rental in India and not surprisingly found that not only there is no standard and quality assurance in this sector but also that there are no national players. There are franchises of some western companies present but they are serving only to a niche segment. To fill this gap Savaari was founded in 2006 with an initial investment of approximately Rs 55,000.
Aggarwal teamed with Mohit Khanna, Rahul Khanna and Manik Shah for this venture. Today, Savaari boasts of services in 60 cities across the country, with a network of over 158 vendors experiencing of over 8 lakh hours.
The car rental industry is big and growing at a steady rate. It was close to 18,000 crores in 2012, around 96% of it is unorganized and consists of local vendors. Thus there are no standardization on quality and prices. Since almost all of these vendors are present in one city, there are no pan India players covering the length and breadth of the country.
Savaari steps in to fill this void. It is present in 60 cities across India and guarantee quality services.
On the scope of the business, Aggarwal said, “Due to the unorganized nature of the car rental market in India, there is no standardization on service standards or rates. In any given city, both can fluctuate immensely. Savaari is the only car rental service provider which maintains control on the customer experience and this service is offered through a two-stepped process to book online which makes life much easier especially for customers who book through their phones.”
With a plethora of car rental companies in India what makes Savaari apart from the rest is that though the industry is big and growing pretty well, majority of it is unorganized and consists of local vendors. Thus there is a good opportunity for consolidation while providing standardization of services. Its ace lies in one point of contact to make a booking anywhere in India by either phone, web or email. Besides, the company uses extensive use of technology to build the right processes to provide controlled experience within car to the customer on a pan India basis.
“Our focus on the market of providing car rentals for the full day or for outstation use comprises 85% of the total market. Most of the other new companies that have come up are focused on point-to-point pickup or airport transfers. Also, we have a customer centric approach to cater to both corporate and retail businesses. As a result of this, we are seeing excellent growth in retail and have over 500+ corporate customers,” Aggarwal added.
For the first few years, the company spent in getting the business and financial model right. The focus clearly being to provide quality services to their customers on a pan India basis at very reasonable prices and still make profit. Aggarwal proudly claims, “We have been cash flow positive since our second year. In March 2012, we raised our series A round of funding and this money will help us create awareness about Savaari and its offering to scale and to build the right technology solution to achieve the scale.”
“We now have an experience of around 1 crore kms across India and our revenue is divided into 60:40 ratio between corporate and retail,” he added.
For the next two years, Savaari is looking to scale the business by creating right awareness about brand and the advantages that the company brings to both their corporate and retail customers. Focus is also on building technology solutions which will help us scale and provide customers with enhanced service and convenience.
The company is also looking at adding vendors on a regular basis in their network and in the next two to three quarters aims to add 10 more cities offering their services in.
This guest post, part of NextWomen Magazine’s August BRICs Editorial Theme, is by Shoba Purushothaman, a serial entrepreneur who recently relocated to India to start a new venture.
Just over two years ago, I decided to take my hunt for adventure to new pastures by exploring the launch of a new venture in India, a country I had visited several times but never lived in. Although my ancestors once came from India, that was several centuries ago and I had no family there. Prior to kick-starting my India journey, I had spent more than a dozen years in New York City as an entrepreneur.
What can an entrepreneur who has had only limited exposure to India find?
- If you can bring a high level of professionalism and be focused, you are already ahead of the game in a market that has a shortage of both these key ingredients of entrepreneurial success. With so many different market opportunities emerging in India today, many entrepreneurs get seduced into attempting too many concurrent ideas and doing well in none.
- Though India has no lack of entrepreneurs and talented ones at that, there are many sectors where expertise is still lacking or that are still very nascent. So, niche entrepreneurs who have a product, service or IP developed elsewhere are able to enjoy first mover advantage in the domestic market, which because of its sheer size offers meaningful opportunity.
- Generally low consumer expectations because of a lack of high quality alternatives can also mean you don’t necessarily have to re-invent the wheel to grab a large market opportunity - you can be successful by doing something much better than the existing incumbent.
- Setting-up and getting a product/service to market can be relatively inexpensive in India. While there are caveats to this, in general labor and basic costs can be a lot lower than in a developed market even after factoring in various inefficiencies.
Start-ups can get a product to market and often reach a break-even point to demonstrate proof-of-concept with a fraction of what it takes in a market such as the U.S. or Germany. My own experience shows that a back-of-envelope calculation on the capital it takes to get a start-up in India to a level where you can truly start to scale is anywhere between $100,000-$250,000. Getting to a similar milestone in the U.S. would be north of $500,000 or even $1M.
What are some rules of the road that will serve you well?
- Do primary research yourself. Having spent a couple of years now working on our venture we’re even more convinced that it wouldn’t have been possible to rely on analyst reports or anyone else to report back on market opportunity, access and go-to-market strategy. Reading between the lines and taking it all in yourself is part of the critical process in a market with little transparency and standards to rely on.
- Be on the ground to pump the flesh and meet & greet. Make India’s hierarchical and status-conscious DNA work for you by taking the time and trouble to network and build business relationships with senior people yourself. I was amazed to find it easy to connect with many experienced and successful business people and other industry experts by simply reaching out. People will give you that first meeting pretty easily in India but they aren’t likely to bother with a B-school intern you might put on the case.
Being front & center yourself has several potential payoffs:
- The idea that a foreign entrepreneur would choose to come to India to start a business is almost universally viewed as a compliment to the country’s opportunity (even if you sometimes wonder if you are nuts!) and stokes national pride – and people can go out of their way to help make things happen and share valuable insight.
- But most of all, Indians love to talk. Spending an hour with someone can very often yield amazing market intelligence that you simply cannot get through other means.
Finally, be prepared to go through a painful process to recruit talent. Yes, it’s worse than you think!
- Several factors impact putting your initial team together – one, there’s a general skills gap which means really good talent is much sought after and consequently out of price reach of most start-up budgets. The scarcity of talent and the willingness and ability of large MNCs, consulting firms and a slew of other big name entities to lure status-hungry Indians to join them by offering big titles and corporate perks exacerbates the talent hunt. And, Indians are generally conservative and the prospect of joining a brand new company that they haven’t heard off is not something that the average Indian finds attractive.
- And all that even before you get to the hiring hassles caused by the cultural, work ethic & value systems’ differences between India and a more developed economy like the U.S.!
As India’s economy increases its profile and share of the global economy, I have little doubt that more and more entrepreneurs from far-flung places are likely to find it too compelling to stay away from.
Starting a company – and growing one to scale – isn’t easy in any market. But in a market like India, all that pain up-front could result in some tremendous gain later on given the huge untapped market opportunity that a youthful population that is steadily increasing its disposal income offers.
Shoba Purushothaman is an entrepreneur who has previously started and grown business in Europe, U.S. and Asia. She is currently focused on her third start-up, this time in India. Training Ventures (India) is building a portfolio of training businesses aimed at narrowing the skills gap in India as it becomes a key part of the global economy.
Syndicate Partners: The NextWomen Magazine
I’ve often thought that the biggest hurdle to becoming an entrepreneur is because the word is so frigging difficult to spell. After a few months I can now finally spell it without autocorrect.
In recent months I’ve gone out on my own. Cast myself into the frenetic feeding frenzy of freelance (and alliteration) or, its more formal title, entrepreneurship. All joking aside, close friends – and blog readers – ask me “How’s it going?”, “Do you think you’ll do this forever?”, “Do you miss a steady job/income/office?” so I thought I’d take this opportunity to get some initial thoughts down.
Let’s get this part out of the way quickly….It is a stereotype
All the blog posts and magazine articles are right. It is feast & famine. Looking at email and iPhone every 5 minutes willing it to ring with your next gig. It’s a hundred conversations for 5 bona-fide opportunities. It’s a million cups of coffee – and a new caffeine threshold. It’s a Bedouin lifestyle humping your laptop from Starbucks to Starbucks finding that elusive free wifi. Most importantly,it’s a massive rush….
So, Dear Reader, here is what I’ve learnt;
Network or Die: Pretty obvious but if you aint drumming up new leads and prospects you’ll fail. Get over the aversion of asking friends and colleagues for projects. Get over your shyness and look for ways to find new avenues to work. Hank Blank writes a very practical (and prolific) blog on Networking. His tips are crisp, astute and, importantly, highly actionable.
Determine your value: A prospect asked me recently “so what can you do for me?” My answer was so long-winded I think I only missed offering up “Bar Mitzvahs and children’s parties” That’s not a value proposition, that’s value delusion. Yes, I can do many things (including parties) but what is it I do well. Ideally what do I do better than others. Your prospects shouldn’t have to work that out for themselves. That’s your job.
Never say No. Don’t always say Yes: Be mindful of the projects you sign up for. Securing projects you can do “okay” means no bandwidth for projects you can be spectacular at – and build equity/reputation behind. When presented an opportunity always evaluate it against your value proposition – not just your bank balance. Taking a lucrative but ill-positioned assignment could hurt you immeasurably.
Build your partner ecosystem: Business basics. A single person can’t scale. You need partners for numerous reasons. Access to prospects. Differing POV and ability to challenge your ideas. Companionship. Complementary skills. Pretty obvious right. Two things I’ve learnt. Always seek out truth-tellers because that’s invaluable input when you’re on your own. Two, expand your view of partners. Complementary ones are obvious. I’ve find it never hurts to have a few supplementary ones too. Folks who do what you do. Folks you can throw a project to when you’re too busy and who will pay you back in kind later. Remember your clients come looking for a solution, seldom a person, so being able to provide a solution – even if it’s another person – carries weight.
Bond physically, scale virtually: People do business with people they’ve met or feel they know. Your initial gigs will be people you’ve had coffee with. However, use virtual settings to amplify what you’re unable to do in person. Be highly visible online. Write blogs. Contribute to discussions. Build a virtual presence that deepens and amplifies what you physically could never do as a single person. While I may not personally hold much stock in Klout, it is imperative that prospects – and partners – can gauge what you’re all about and whether you’re someone they wanna work with. The default place for gauging that is Google, not Starbucks.
With the zealotry of a reformed smoker I’m a huge proponent of going solo. The harsh reality is that more companies are looking for resources they can turn on-and-off rather than absorbing overhead and benefits. Let’s face it, marketing is also inherently a young person’s game so unless Sir Martin or Mr Levy are buying your agency and writing you a huge cheque, you’d better have a plan for “life after marketing” – going solo is one way to build your Plan B.
These are my initial observations. What have been yours? What landmines have you stepped on that I’ve not addressed? How have you remained committed to the entrepreneur’s life?
About The Author: Web Site: http://www.hiltonbarbour.com
An insatiable curiosity is my defining characteristic. Which is probably why I got into advertising over 14 years ago. I know it aint a real job in comparison to say, a fireman or a nuclear physicist but hey. Anyway, along the way I've developed an opinion on a coupla things. This blog allows me to air a few of those opinions and thoughts. I thank you for your visit and welcome your feedback.
Reproduced with permission from his blog
|Two completed T Shirts and one transfer in progress|
Last week, we presented at Unpluggd, an event for selected startups to showcase their stuff. At the end of our presentation, we encouraged people to tweet about @eyesandfeet (with the event hashtag #unpluggd2). We've promised 10 lucky winners their own custom QR code T-Shirts.
|This could be yours - in more ways than one|
Some of you may know of our fascination for QR codes. Wearing a QR code enabled T-Shirt to an event and promising people a chance to win their own is an interesting (and inexpensive) way to build some buzz.
We're now sifting through the entries to identify the winners, each of whom will be encouraged to give us 250 'custom' characters of text they'd like their QR code to carry. This will then be converted to a QR code, printed on to T-Shirt transfer paper (along with the Eyes And Feet logo, as shown below), ironed on to a T-Shirt in their chosen size, and shipped to them.
Our original idea was to select a few winners at the event and print/iron/transfer/deliver their T Shirts before the event got over. We'd even carried our inkjet printer and iron - drove them all of 250 miles to the event.
Unfortunately, we were amongst the last to present so there wasn't much time to do our "Iron Man" impersonation. Nevertheless...
Total cost: some effort, electricity, printer ink, and $63 ($50 for T Shirts, $3 for T Shirt transfer paper, $10 for courier charges)
Buzz Value: Priceless
Back in Chennai, there is a restaurant called Eden in Besant Nagar. It is a multi-cuisine restaurant which serves Indian (South & North), Chinese and Continental dishes. I have always enjoyed the food there because it was great in taste and quality, the ambience was homely and it was priced correctly. I have never stepped out of Eden feeling fleeced.
I almost always knew the person who was waiting on us. It would be a friendly smile and there would also be some friendly suggestions on what’s new in the kitchen. The consistency in quality used to be awesome to say the least. I am not sure if it was because it was always the same chef .
There will always be a queue to get a seat with the waiting time ranging between 15-45 minutes. But you would end up gobbling the food when you see it and would forgive Eden for the waiting time. They would make it worth it.
I still believe that one of the key positive about Eden was its small size. Because, the clientele will always know what to get, the variety within and the quality was always assured. To achieve these positives in the food business is very difficult and Eden had. The cash registers being noisy would never be a complaint if that happens.
The inevitable then happened. They opened more outlets as franchises. Everything changed… the ambience, quality of the food, the wait time, the homely feeling, the familiar waiter. Poof! It was gone.
It is four years since I moved out of Chennai and I am not sure if people still go gaga about the outlet anymore.
This is true of many services brands. From creative hot shops to boutique consultancies many brands have come up in recent times. The big question will always be, “How big can I grow?”
The purpose of hiring these small services firms is the talent pool. If a brand engages a boutique firm started by a star strategist and is willing to pay a premium for their services, it means that they want the star strategist to work for them. But organizations which have grown beyond their shoes engage second rung employees who would service the brand with limited or no input from the star. Won’t it leave a bad taste?
My two cents:
1. Boutique services firms in my opinion must (at least consider) have a ceiling on how big they can grow.
2. The firm MUST have a ceiling on billing OR the number of clients. That way the clients are sure of the services that they would get and hence the relationship stays.
3. Promote work with non-regular clients only on a project basis. By doing so boutique firms get to keep their manpower meaningfully occupied and also earn a bit more than they otherwise would.
4. Beyond a point, if growth becomes an imperative, acquisitions may be considered because this mode of growth comes with clients, people and scale of operations.
5. Limit the scope of services to specific industries, which would help open more doors within the set of industries and also in creating a niche.
I have read a great one-liner. Fall in love with your job, never with the organization. By falling in love with the organization the start-up kings create, they end up killing it themselves. Perhaps that is one reason why I will ALWAYS salute Mr. Ramesh Chauhan. He was ready to exit the business of soft drinks, but never exited being in business. He loved his job, not the organizations he created.